Amazon v. Malloy: A Shakeup in NV Wage and Hour Law Results in New Legislation

The Nevada Supreme Court created new questions for employers on whether they will be responsible to compensate employees for time spent on activities preliminary or postliminary to work activities in its recent opinion in Amazon v. Malloy.

In Malloy, the court answered the narrow question of whether Nevada’s wage and hour laws incorporate the exceptions to compensable “work” that are laid out in the federal Portal to Portal Act (“PPA”). The certified question arose in underlying federal litigation in the U.S. District Court for Nevada concerning whether Amazon was required to pay its employees for the time spent underdoing testing for COVID-19 before each shift. Amazon moved to dismiss the case, arguing that the COVID-19 testing time was not compensable “work” within the meaning of the PPA. The district court denied the motion to dismiss, holding that Nevada law had not incorporated the PPA, and as a result, the pre-shift screenings constituted work that required compensation under NRS 608.016.

Because Nevada’s wage-hour laws coexist with their federal counterpart, the Fair Labor Standards Act (“FLSA”), the court first undertook an analysis of whether FLSA, the PPA and Nevada’s wage-hour laws parallel each other. Congress did not define the term “work” when it enacted the FLSA, but the U.S. Supreme Court has interpreted it to mean “physical or mental exertion (whether burdensome of not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.” Congress then passed the PPA to amend certain provisions of the FLSA and, specifically, providing exceptions to certain activities that would otherwise be entitled to compensation under the definition of the term “work” provided by the Supreme Court.

The PPA explicitly excludes “activities which are preliminary to or postliminary to” the principal activities the employee is employed to perform from compensation. Nevada wage-hour laws in contracts only state that “an employer shall pay to the employee wages for each hour the employee works.” Further, Nevada’s administrative regulations provide that “[a]n employer shall pay an employee for all time worked by the employee at the direction of the employer, including time worked by the employee that is outside the scheduled hours of work of the employee.”

Amazon argued that the PPA’s exceptions to compensable work must be incorporated into Nevada law since Nevada modeled its wage-hour statutes after the FLSA. The Nevada Supreme Court disagreed, however, noting that while Nevada’s statutes are modeled after the FLSA in general, Nevada’s statutes do not indicate an incorporation of the PPA’s amendments to the FLSA.

The court held that Nevada’s exceptions to compensable work are materially different from those contained in the PPA. The PPA provides a catchall provisional type of exception that allows certain work to go without compensation, while Nevada law does not contain that same catchall provision. Instead, Nevada law only contains narrow exceptions to compensable work, like employer/employee agreements for an exception for sleep periods during a 24-hour shift or allowing domestic service employees who reside in the workplace to agree to accept compensation for sleep and meal periods.

In other words, Nevada’s narrow exceptions provide more protection to workers than the PPA’s amendments to the FLSA do. The court determined that the plain language of Nevada’s wage-hour laws does not evince a legislative intent to incorporate or mirror the PPA.

In the wake of the confusion created by Malloy, Nevada employers in various industries including mining, construction and gaming were faced with the prospect of potentially compensating employees for additional activities, such as free pre-shift meals, transportation to and from a worksite or time spent dropping off a child at in-house day care. In response to this ambiguity, the Nevada legislature, during the recent special session, passed Senate Bill 8, which amends NRS 608.016 to explicitly incorporate sections 2 and 4 of the PPA and to carve out donning and doffing time as still being compensable.

Now Nevada’s overtime laws more closely match the federal standards. The governor approved the amendment, and it immediately went into effect. This amendment provides further clarity to Nevada employers regarding the scope of compensable work, but questions still remain. Donning and doffing are not the only activities preliminary or postliminary to shifts that could be compensable.

Employers should seek legal guidance to ensure their compensation practices fall within these new guidelines. Specifically, Nevada employers should examine whether additional activities are generally intrinsic to the employee’s principal tasks and duties such that they could be considered compensable. Nevada employers should also put into practice detailed methods for tracking all time worked to make sure your wage practices are compliant with these new standards. Guidance from employment counsel is the most effective and proactive approach to ensure your policies and practices meet these requirements.

This document is intended to provide you with general information regarding the Nevada Supreme Court’s ruling in Amazon v. Malloy. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.